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Child benefit to be scrapped for some families

Parents who pay more than 40% tax currently will lose their child benefits from 2013 in a change to the system to help lower income families, the Chancellor George Osbourne has revealed.

Parents who earn over £44,000 per year pay 40% of their earnings to tax, and they would be the families affected by the Government’s plans.

“It’s a big decision for us, but we think it’s absolutely necessary and fair given the financial situation we face,” George told BBC One’s Breakfast.

The Chancellor explained that he felt the public would accept that it’s unfair to tax someone earning £18,000 per year to pay child benefit for a parent earning £50,000.

Currently all families with children receive child benefit, with £20.30 per week given for the first child and £13.40 for any other children.

“It’s very hard to justify taxing people on much lower incomes in order to pay the child benefit to some of the better off in society,” explained George.

The cuts will affect homes where just one parent earn over £44,000. However, if both parents earn less than £44,000, they will still receive child benefit. This means a couple could earn a combined income of £87,750 (as reported by the BBC) and still get the benefit as long as both of them earn under £44,000.

This change to the benefit system is set to save about £1 billion.

Do you think that the child benefit system should be changed? Let us know…

If the cut really is necessary, it must at least be seen to be fair and apply to hosehold income, not just to higher rate payers. It seems a huge injustice that a couple each earning £22,000 would keep the benefit when a single income household with £45k would lose out. Especially when a dual income household benefits from 2 individuals' personal allowances, and so is putting less into the government's tax pot to start with. If I were a household with income between £44k-£88k I would feel very slighted indeed by this announcement.

If there has to be cuts then scrapping child benefit to the better off does seem to be a fair way to do it as they don't need the money as much as those worse-off. It DOESN'T seem fair how it doesn't take into account the combined income of both parents if both are working though. This seems to undervalue stay-at-home parents who are generally undervalued for the stabilising element they add to a child's upbringing.

I think it is the fairest way of doing this and I think that other benefits such as tax credits cut in the same way.

Speaking as somebody who earns minimum wage I have always felt that it is unfair that somebody who earns 4, 5, 6 times my salary can be entitled to exactly the same benefits as me. Do they really NEED this extra money? I do as every penny I earn seems to go on food, billsand house maintenance, and I want to provide as best I can for my daughter. To me £44K PA is a colossal amount and if my household income was anywhere close to that I would consider myself to be rich.

I know there will be many complaints from those who will be affected but they should try living on minimum wage for a few months, then they might realise just how financially well off they really are.

I'm aggrieved that the limit is not adjusted for 2 earners in the household. £44K is a high salary but £22K is not, it is less than the UK average.

Once again, families where both parents are working are being penalised (as they are with working tax credits). In fact, we have much less disposable income because a high proportion of our salaries go on childcare.